Greater transparency is called for in overseas ATM cash withdrawal service in foreign currencies, according to a Consumer Council survey last month that revealed considerable variances of fees and charges by the banks and global ATM network service providers.
The lack of adequate information disclosure is hampering consumers' choice on whether or not to use ATM services for cash withdrawal while travelling abroad, as they are often baffled about the exact various costs involved in using the service.
As more and more people travel for business and pleasure, the need for cash in foreign currencies while abroad - both in the mainland and overseas countries - is greater than ever before.
In the survey, the Council collected from 17 banks fees and charges applicable in overseas cash withdrawal service, and related issues of consumer interest. In general, consumers may be subject to 2 main types of levy: the service charge per transaction of overseas cash withdrawal; the handling fee for foreign currency conversion.
On annual fees of ATM cards which consumers will need to use for the transactions, the majority of banks (13 out of 17) charged from $30 to $55 or RMB￥50 per ATM card, but 1 of them waived the fee for the first year and 3 others indicated they would waive for selected customers. The remainder 4 banks had no annual fee charge for use of ATM cards.
On overseas cash withdrawal fees, depending on the ATM network used, the charge per transaction ranged from $10 to $40 or RMB￥12 to ￥20 in overseas countries and in the mainland. One bank did not charge such fee, and 4 others would waive the fee for selected customers or customers using ATMs of specified banks and areas abroad.
On exchange handling fees, the survey could find scanty information on this levy, with the exception of a very few banks. Banks that do not impose exchange handling fees, will do well to let consumers know that the service is free.
Besides fees and charges, consumers are concerned about the issue of exchange rate used for the conversion of the foreign currencies into Hong Kong dollars as ATM cardholders are billed in the local currency.
Generally, the conversion depends on the prevailing exchange rate to be determined by the ATM network (e.g. MasterCard/Cirrus or Visa/Plus or Union Pay) or the bank, on the conversion day or the transaction posting day.
Consumers can only get to know the total of the converted amount together with any charges that may be imposed, from their monthly bank statements. But only the cash withdrawal date and the deducted amount in Hong Kong dollars would appear in the statements - the exchange rate used or if any exchange handling fee included would not be disclosed.
As observed in the fee schedules of the banks covered in the survey, such information as the transaction process of overseas cash withdrawal or the levy of exchange handling fees (if any) is not consistently disclosed by all for information of the consumers. Banks are urged to increase the transparency of their overseas ATM cash withdrawal service.
It is understood that the Hong Kong Monetary Authority has already raised this issue with and provided recommendations to the Hong Kong Association of Banks which is now working on improving transparency in this regard and will provide recommendations to banks shortly.
Consumers are advised also to pay heed to what ATM network or networks are supported by their ATM cards. As indicated in the survey, the ATM cards of 12 banks were supported by a default ATM network, and 5 others would provide more than one ATM networks for consumers to choose from before card issuance.
If consumers need access other than the default ATM network, they can consider applying for cash withdrawal function to be added to their credit cards, that is to link their personal credit cards to designated savings bank account to expand their usable ATM networks. The risk is if they mistakenly withdraw cash from their credit card accounts, it will be regarded as a cash advance and hefty finance charges will follow.
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- 2014.05.15